The rich behind Lego are eyeing London real estate

Kirkbi’s purchase of the Porter’s Wharf office marks its 3rd property investment in the UK capital

By BLOOMBERG

COPENHAGEN • The fund managing the wealth of the billionaires who own Lego AS wants to buy more London real estate.

Undeterred by Britain’s plan to exit the European Union (Brexit), the US$16 billion (RM61.92 billion) Kirkbi AS fund earlier this year bought the Porter’s Wharf office property in London’s King’s Cross district, marking its third real estate investment in the UK capital, it told Bloomberg.

“Some investors, including us, are a bit nervous about the development in the UK,” Soren Thorup Sorensen, Kirkbi’s CEO, said by phone. “But there are areas in London that aren’t linked to the financial sector.”

The Lego fund’s latest purchase is in an area dominated by technology, media and telecommunications companies, which Sorensen is betting will probably be less exposed to the exodus that may hit the London banking community once Brexit takes effect. Sorensen also said Kirkbi is big enough to sit out the short-term jolts stemming from the uncertainty surrounding the UK’s depature.

Buying up London property fits into the Lego fund’s overall goal of expanding its real estate portfolio, which grew 14% last year to US$1.2 billion.

“We very much hope we wi ll do more in 2018,” Sorensen said. “We will look at Germany, Switzerland and the UK.

“There may be more uncertainty in 2018 than we have seen in many years, but that also means that someone like us will be able to make good long-term investments,” he said. The fund, based in western Denmark, prefers properties it can develop, he said.

Kirkbi chairman Kjeld Kirk Kristiansen, the grandson of Lego founder Ole Kirk Kristiansen, is Denmark’s secondrichest man thanks to the popularity of the plastic bricks that have long been a staple of children’s toy boxes. According to the Bloomberg Billionaires Index, he’s worth about US$5.3 billion. Kirk Kristiansen recently handed more control to his children Agnete Kirk Thinggaard, Sofie Kirk Kristiansen and Thomas Kirk Kristiansen, who each have a fortune of about US$4.9 billion.

The fund also owns properties in Denmark, but doesn’t see much potential for more investment there in the near term.

“The property market in Copenhagen has seen a lot of demand, so we think it’s difficult to find projects that will give the returns that we want,” Sorensen said.

Kirkbi’s main assets are a 75% stake in closely held Lego, as well as the toymaker’s trademarks. It also has a 30% stake in Merlin Entertainments plc (which operates the Legoland parks), stakes in Danish firms ISS AS and Falck AS, as well as other stocks and bonds.